ASIC welcomes the release of the 2013 Independent Review of the Financial Ombudsman Service (FOS) and FOS’s response to the review’s recommendations.

The review assessed FOS against ASIC’s benchmarks for external dispute resolution (EDR) schemes: accessibility, independence, fairness, accountability, efficiency and effectiveness.

It found FOS, an ASIC-approved EDR scheme, meets all of ASIC’s requirements, except – in some key respects – timeliness.

On the quality of FOS’s decision making, the review found FOS has a ‘multi-pronged approach’ to developing ‘consistent quality’ in its decision making, noting its staff were qualified and experienced. ‘We think that these practices are working,’ the review found.

ASIC welcomes the review’s focus on timeliness and its recommendations, and notes FOS’s positive response and its intended changes to its processes and structures to address this critical issue.

ASIC acknowledges the key role played by FOS in determining many thousands of consumer disputes each year. ASIC agrees with the review's findings that while there are improvements that can be made, FOS delivers a critical service and this review highlights the need to continue to refine and improve that service.

ASIC will liaise with FOS about implementing the review's recommendations.

Download from FOS website
2013 Independent Review (PDF 2.27 MB)
FOS media release responding to the review (PDF 130 KB)

Background

EDR schemes provide consumers with a relatively cost-effective and more accessible alternative to going to court where a dispute about financial services or credit services cannot be resolved by the parties.

They also provide an opportunity to improve industry standards of conduct. The schemes gather data and intelligence about disputes, and, by maintaining close connections with industry, they can assist in improving market conduct, product features and standards of disclosure to reduce the risk of future disputes arising.

ASIC’s guidance on dispute resolution requirements and its approval of EDR schemes are in Regulatory Guide 165 Licensing: Internal and external dispute resolution (RG 165) and Regulatory Guide 139 Approval and oversight of external dispute resolution schemes (RG 139).

Under RG 139 a scheme must commission an independent review of its operations and procedures every 5 years.